So, you’re thinking of a home equity loan? Have you explored other loan options?
So, you’re thinking of a home equity loan? Have you explored other loan options?
Here are some key points about home equity loans
- A home equity loan lets homeowners tap into the equity they've built up to fund important financial needs.
- These loans provide a lump sum payout, which is then repaid with fixed monthly payments over a set term.
- Securing the most favorable rates typically requires a strong credit score, adequate home equity, and meeting specific lender requirements.
- There may be closing costs and underwriting involved with the origination
A table of home equity loan rates as of 8/27/2025 from The Wall Street Journal is below:
Lender | Minimum APR | CLTV | Amount |
Achieve | 6.74% | 80% | $15,000 - $300,000 |
SoFi | 6.99% | 85% | Up to $350,000 |
Navy Federal | 7.34% | 100% | $10,000 - $500,000 |
US Bank | 7.65% | 60% | $50,000 - $99,000 |
https://www.wsj.com/buyside/personal-finance/mortgage/home-equity-loan-rates?mod=Searchresults&pos=1&page=1
Another option for Financing is a box spread loan: Here are the rates from SyntheticFi for box spreads as of 8/27/2025:
Term | Rate Range |
3 months | 4.45% ~ 4.58% |
6 months | 4.38% ~ 4.47% |
1 year | 4.10% ~ 4.14% |
1.5 years | 3.98% ~ 4.06% |
2 years | 3.92% ~ 4.00% |
2.5 years | 3.83% ~ 3.91% |
3.5 years | 3.81% ~ 3.98% |
4.5 years | 3.82% ~ 3.94% |
5.5 years | 3.88% ~ 3.97% |
https://app.syntheticfi.com/cob
But what is a box spread loan and why are the rates so low?
A box spread is an options strategy that involves a combination of four options contracts—specifically, a bull call spread and a bear put spread using the same strike prices and expiration dates. This is done using your non-qualified portfolio as collateral. The set up produces a fixed, predetermined payoff (principal + interest) at a future date, regardless of movements in the underlying asset. By including both calls and puts in opposite directions, a box spread effectively hedges away the risk from the underlying securities. European style options are used which cannot be exercised before settlement date. There is no closing cost on box spread loans and the loans can be rolled. Because the interest is accrued via options, the interest is taxed as 60% long-term and 40% short term capital gain/loss, making it tax advantaged for some individuals.
Box spread loans in plain English:
- Using your portfolio as collateral, a series of options are placed, providing cash to fund important financial needs.
- Principal and interest are due on the expiration date; you can repay principal and interest in installments or at the end.
- The loans can be rolled if the principal isn’t repaid, meaning you can automatically take out another loan.
- Rates are lower than home equity loans and other conventional financing.
- No closing costs, 0.2% annual fee for loan maintenance.
- Tax advantaged interest accrual as portfolio losses.
In conclusion
If you are exploring a home equity loan, you may want to consider box spread loans as an alternative. Box spreads provided lower interest rates, have flexible repayments, and may be more tax advantaged. Contact for more details on your specific situation to see if a box spread loan is right for you.